Wealth Management Defined for Investors

What exactly is wealth management? Learn all you need to know in the Asset Quest tutorial!

The term “wealth management” is thrown around plenty, in the boardrooms of private client firms, in trade and mainstream articles and by financial advisors in front of clients. Still, most professionals are hard pressed to actually define the term with any degree of precision especially in regards to real estate investments.

Wealth management is very straightforward. From the affluent individual’s perspective, wealth management is simply the science of solving/enhancing his or her financial situation. From the financial advisor's perspective, wealth management and asset allocation is the ability of an advisor or advisory team to deliver a full range of financial services and products to an affluent client in a consultative way.

Theoretically, a wealth manager can provide every single financial product in existence. In reality most wealth managers specialize in services and products they feel most comfortable with.

A further defining quality of wealth management is that it is delivered in a consultative manner. By being consultative, wealth managers are truly client-centered. A good wealth manager meets a client without any presupposition about what financial products or services are appropriate for that affluent individual.

While it is common for a wealthy individual to be sitting with a wealth manager to address a particular need (investment management, say), the consultative wealth manager’s overriding objective is to understand the person and find out what’s important and why. Investment management is also being able to bring in the appropriate experts and provide the appropriate financial products.

Wealth management is the consultative process of meeting the needs and wants of affluent clients by providing the appropriate financial products and services. Wealth management entails coordinating a team of experts to address the needs and wants of affluent clients.

There’s considerable research showing the income advantages of financial advisors who are wealth managers to those that are principally investment oriented. In general, a financial advisor transitioning to a wealth manager will see profits increase by 35 percent or more within a year. Hence, if a financial advisor’s annual income was $250,000 before becoming a wealth manager; his or her annual income will be $337,500 within a year.

That said, not all financial advisors are good candidates for becoming successful wealth managers. Many financial advisors are doing quite well running money, for instance, and are not inclined by temperament or preference to transition to becoming wealth managers. At the same time, it’s very important to realize that wealth management is not for all affluent individuals. It’s usually appropriate for the wealthy with diverse needs and wants.

Looking for wealth management services? Asset Quest is here to assist. Give us a call at 239-541-8448 to learn more.